Ford India's Baffling Product and Pricing Logic

There’s no doubt that the Ford EcoSport, launched in June last year, has met with tremendous success in the Indian passenger car market. In fact, its blend of style including its SUV-like looks, multiple powertrain options (four) and technology combine to make it an irresistible package. But is that all? Didn’t the starting price of just Rs 5.59 lakh at launch contribute to its ‘wow!’ factor? I’m sure the cracking price did play a major role in incentivizing potential customers to troop into showrooms and put down hard cash for the car.

While Ford now has the happy problem of a long waiting list for the EcoSport, another one of its products has been more or less stillborn. The new Fiesta, which debuted two years earlier, had a starting price of Rs 8.23 lakh. With sales a mere trickle, Ford swallowed its pride and reduced the price of the Fiesta a few months later, de-contenting the car in the process. Sales have still remained pretty poor. While some customers complained of a less than optimum rear seat, others didn’t care much for the styling, but the unanimous consensus was that Ford India was asking too much money for too little car.

But the pricing strategy itself defies logic. The EcoSport and the Fiesta both share the same basic platform. They also share the same powertrains, with the exception of the 1.0-litre EcoBoost engine, which is an EcoSport-only option (for now). How then, could they be Rs 2.64 lakh, or 47 %, apart in price?

I suspect the price of the new Fiesta back in 2011 also had to do with Ford wanting to create clear differentiation between the older Fiesta (since renamed Fiesta Classic) which was still selling in reasonable numbers, and the new Fiesta.

With its flexible B-platform, Ford will soon produce four products sharing much of their mechanical essentials, which includes the Ka hatch and Figo concept sedan, in addition to the new Fiesta and EcoSport.

Maybe it is time Ford India put the Fiesta Classic to sleep, and in future, pulls the plug on the Figo hatch as well. God forbid they keep it going as the 'Figo Classic'!

There’s been a change in management at Ford India, and the way Nigel Harris gets down to shepherding the range now will be crucial for the brand’s long term health and success. While Michael Boneham presided over the launch of the new Fiesta back in 2011, the EcoSport was born under Joginder Singh’s watch.

Nigel Harris has got to get the pricing right for the re-launched Fiesta and this model needs to see strong sales if Ford India wants to be taken as a serious contender in the Indian passenger car market. The company has traditionally had one strong seller every few years, rather than a portfolio of competitive products at various price points. The B-platform family gives Ford India a chance to do just that. Ford needs to believe that brands outlive the products. Honda with its City is one fine example of that.